Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia
Date: Thursday, 4 June 2020
DAVID KOCH: Joining me now Finance Minister Mathias Cormann. Minister, thanks for your time.
MATHIAS CORMANN: Good morning.
DAVID KOCH: We had everything but the kitchen sink thrown at us in the March quarter. We had droughts, we had bushfires, we had COVID. 0.3 per cent – I thought was a pretty good result. June is a different matter. What is Treasury telling you to expect for a June quarter contraction?
MATHIAS CORMANN: Treasury has said publicly that they would expect unemployment to rise up to 10 per cent. The good news is that not only have we performed comparatively well in March when you look at what is happening in other parts of the world, but even now, in June, we are in a better position than we had feared when we are putting our support packages in place towards the end of March. The reality is that our fight against the virus has been more successful than we feared it would be. The number of cases across the community is much less than we feared it would be, so the easing of economic restrictions has been better and faster than we feared it would be. While the June quarter is clearly going to be the quarter where we are going to cop the brunt of the economic impact, we believe it is not going to be as bad as it could have been.
DAVID KOCH: Okay, so a lot of people saying between five and eight per cent contraction and then they see, even the Reserve Bank governor is optimistic on this, a pretty quick bounce back in the September quarter.
MATHIAS CORMANN: That is what we are working towards to ensure that we have the best possible chance for the strongest possible recovery on the other side. It is very important in that context that we do everything we can to minimise, to absolutely minimise, the risks of a second wave, to ensure that whenever or if ever there is a localised outbreak that we can respond to it very swiftly so that we can maximise the recovery in a way that is COVID-safe.
DAVID KOCH: And one of the things you are doing is this $25,000 HomeBuilder cash grants that you are giving out. Great idea, keep people in jobs. But I must admit, then I read the details. It is means tested for singles, $125,000 a year. If you earn above you don't qualify, or $200,000 for a family. And the renovations have got to cost between $150,000 and $750,000. If you are on a $125,000 a year in a recession, are you really going to renovate $150,000 worth?
MATHIAS CORMANN: Our expectation is that this program will cost us about $688 million. This is something that we have developed working together with the industry and we do believe this will provide substantial support to... interrupted
DAVID KOCH: Are the conditions too strict though?
MATHIAS CORMANN: We do not believe so. We believe that a program like this needs to be appropriately targeted and that is what we have sought to do. There has been significant falls in demand in the residential construction sector of about 20 per cent or thereabouts and we do believe that this will provide necessary support to ensure that activity returns.
DAVID KOCH: Alright. Mathias Cormann, appreciate your time.